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Anglo-Egyptian Agreement

Volume 463: debated on Tuesday 5 April 1949

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asked the Chancellor of the Exchequer how the concessions made under the Anglo-Egyptian Financial Agreement, 1949, compares with those of the agreement of 1948; and for what reason His Majesty's Government did not see fit to press that as a condition for the conclusion of the present agreement Egyptian sterling balances should be scaled down to an equitable figure.

The 1948 Financial Agreement provided for releases of £21 million "straight" and £11 million as an addition to Egypt's working balance, making immediate releases of £32 million in all. This year's Agreement provided for an immediate straight release of £12 million and additional releases up to £18 million will be made, in amounts of £3 million, but only if and when required in order to maintain Egypt's No. 1 Account balances at £45 million. The provision of dollars this year is the equivalent of £5 million against £61 million in 1948. As regards the second part of the Question, the reason was that this is a short-term agreement. His Majesty's Government have made plain to the Egyptian Government their views regarding the adjustment of these sterling balances and have reserved their position.

The Chancellor says that this is a short-term agreement, but is it not yet another series of such agreements each of which has resulted in further grants by this country to Egypt? Is he further aware that of an anticipated trade balance of £47 million between Egypt and this country no less than two-thirds will be provided by credit from this country and that that, therefore, will result in an unrequited export?

I am quite aware of the circumstances of the agreement, which I consider wholly satisfactory.